EU lifts Milk Quota System, Milk Procurement Price Continues to Fall

According to German media reports, from April 1, the EU milk quota system officially ended, dairy farmers are worried that prices will continue to decline. Insiders said that the current low raw milk prices have made many farmers unable to balance the cost and profit. When the quota system abolished, the milk price is likely to continue to fall, but the price of milk products on supermarket shelves will not change.

Reportedly, the EU milk quota system has gone through 31 years of history, the original intention for this system was to protect the dairy industry and seek to balance supply and demand by setting up production ceiling.

In the late 1970s and early 1980s, European milk was overproduced, with the so-called "Milk Sea" and "butter mountains". The European Community (now called the European unio, EU) has taken some measures, including the sale cheap "Christmas butter" sale in December, and exporting butter to the Soviet unio.

In 1984, the milk quota system came into being. This mechanism was originally planned to function only for five years, but later was extended repeatedly. Thrust of this mechanism is to limit milk production. As long as dairy farmers’ production exceeds the upper limit, farmers must pay a penalty.

According to the assessment of the German Federal Ministry of Agriculture, this mechanism does not really play a role in the protection of steady income of farmers. On the contrary, in the past 30 years, the price per kilogram of raw milk has fluctuations of 20 euro cents. Many small dairy farms can not sustain livelihoods and be closed.

The director-General of the European Dairy Association and the German agricultural expert Alexander Anton believes that the end of the quota system has no impact on the price of milk products on supermarket shelves.

The European Commission takes a similar view that based on past experience, there is no necessary connection between the purchase price and the end consumer price of milk. Even if farmers sell milk at a lower price, dairy products bought by consumers may not become more favorable. (www.chinainout.com)